Can You Afford to Take This Job?

The Answer May be NO

I just returned from Spain and I’m still spinning from sticker shock. Okay, I can live with high prices, but the global decline in the value of the US dollar, along with the resulting poor exchange rate, meant goods and services in Spain were costing me 50% more than the already pricey sticker-price.

The exchange rate last week was $1.50 US to €1.00 Euro. This bumped an €8 burger up to $12 and a €70 hotel room up to $105.00. Get the picture? A coke and burger at McDonalds came to $10.50. Ouch! For a short trip to visit friends I could deal with the expense. The idea of living and teaching in Western Europe, however, didn’t make financial sense. Unless, of course, I was paid in Euros and at a figure I could live with.

Who’s to blame for the sinking US dollar? I’ll avoid that topic but will say schools that capitalize on the situation at their teachers’ expense are without conscience. Such schools require parents to pay tuitions in Euros, (a strong currency) while teachers’ contracts specify a salary based on the weakening US dollar. As the dollar becomes worth less and less against the Euro, these schools are spending fewer Euros to purchase the dollars needed to meet teachers’ salaries. This means bigger profits. Of course, teachers are suffering while school owners get rich. Remember, teachers need to purchase local currency with their dollars and their dollar is buying less of it.

The Euro is not the only currency rising against the dollar. In some parts of the world the dollar buys 50% less of the local currency than it did a year ago. Imagine your salary staying the same but your rent doubling along with food and gas; all because it takes more dollars to buy the local currency. Exchange rates have a profound impact on International Educators and failure to research the economic realities of a particular location can and will have devastating consequences on your financial well-being.

If direction and momentum are reliable indicators, the forecast for the future of the US dollar is poor. In January of ’09 it took $1.28 to purchase €1.00 Euro. By December of ‘09 it took $1.51. This may not seem like a big increase but consider that in January ‘09, $1000 bought €781, by December the same $1000 bought only €662. A more startling way to view the change is to see that the cost to buy €781 rose from $1000 to $1179.68. At one time the dollar was stronger than the Euro, but that’s just a sinking memory, now.

For Americans at home in the United States, the weakening of the dollar is having a very positive effect. As the dollar becomes worth less it makes our goods cheaper overseas. Cheaper goods mean stronger exports and stronger exports equal more jobs. Does the US government want to see the devaluating trend reversed? Probably not! So keep your eyes open, do the research and make sure you can afford to accept a job offer that comes your way.


8 thoughts on “Can You Afford to Take This Job?

  1. Yes, I teach! The choice is personal. The “deals” around the world vary. Hope you find a suitable one. But “professional international workers” as a class of professionals who should get a premium? What premium? I suggest that working abroad is largely their premium as well as their preference !!

    The last poster’s paragraph above? Silly bar talk! You’ll find the same envy among “the rest of us” everywhere!

    I am not in favor of proprietary schools (or any others) who rip off people, so watch what you do — but don’t get silly or paranoid, get smart!


  2. When will teachers stop complaining and just refuse contracts if they’re not good enough?

    The problem here isn’t exchange rates and currencies these are always fluctuating – just look at the pound/euro/dollar.

    The problem is that teachers are not given proper packages as professional international workers, when will the world actually start paying us for the responsibility of teaching the next generation.

    Isn’t it ironic that the bank and financial managers who have managed to cause the economic crisis get 5 to 10 times the salary plus benefits (I WON’T MENTION BONUSES) of the teacher responsible for their child’s future and wel1being 5 days a week and still complain about tuition fees!!!


  3. Anonymous is right, that’s why we have contracts. In signing a contract, we’re taking a gamble that the currency we’re agreeing to be paid in is going to be stable or increase. Don’t blame the superintendent/board when your currency goes down unless you intend to give the s/b the credit when it goes up. The s/b has a feduciary responsibility to look after the client (students & parents) first, and when we gamble and lose, we shouldn’t expect to be able to change our bet because we lost. The reality is, s/b’s have at times felt an obligation to do something to at least take the edge off the sting. I saw that happen in Asia 10 years ago when those markets/currencies cratered. On the other hand, I’m still waiting to hear of a teacher or administrator who won the currency-exchange gamble give some back to the school. When that happens, I’ll be there keeping it, and right with everyone else feeling like, hey, I gambled, I won – it’s rightfully my money.

    Sean is also right (see? we CAN all be brothers). if schools make it part of the contract to have the option, or at least contain some buffering clause (e.g. allowing teachers to choose to take half local and half dollar or whatever) to protect the teachers, it would provide some peace of mind for teachers, and make it a little bit harder for people being cynical to think admin-types are just trying to find ways to screw them. Mind you, it’s a lot easier to talk about buffering clauses than it is to figure out what their ramifications are, but if Oagadugu can do it, others probably can as well.


  4. I don’t think anyone was suggesting schools switch currencies whenever the market changes direction or that those who disagree need a basic finance course. What I was attempting to share was an example of a school giving educators choices prior to signing a contract as a way of increasing the options for teacher and school alike.


  5. Schools should be fair and transparent, and most are. But it’s not as easy as the OP suggests to be fair to everyone, nor to switch currencies mid-stream. Think of schools, like most, where teachers come from many countries. Anytime currencies change in relative value, some will benefit, and others will lose. So which currency should be used? The one from the home country of the majority of teachers, leaving others high and dry? The currency of the local economy, which may be far less stable than more established currencies? Or does the OP suggest that teachers should be paid in whatever currency is most beneficial to them each month? That would hardly allow a school to plan effectively, and the knock-on effects on the school’s budget for everything else would mean that resources, PD, facilities and everything would be constantly changing. I can imagine the complaints in the staff room in such an environment – no pay will ever make people happy in a school that has no stability.
    That’s why we have contracts. They state in advance what the pay will be, and what the currency will be. Everyone takes their chances – the school and the teachers – as to what currency will do during the course of the contract, but at least everyone knows in advance. If the situation gets as bad as the OP implies, where 50% of a salary’s value is lost, then either the school has to address it, or teachers from those countries will move on. It may sound harsh, but it’s just not realistic to say that schools should switch currencies whenever the market changes direction. Take a basic finance course and it’ll be much clearer than I’ve explained it.


  6. Basically, the article covers the different basic economics of the topic pretty well, but it seems somewhat extreme in the analysis. I don’t buy some of the blanket statements. Over the five years living in a “strong currency” country, I have seen a 10.5% drop in the dollar to the local currency, which of course does take a bite in the budget.

    To make a comparison on costs here and in the USA, another way to see how far your pay goes, I’m quite glad to be where I am. To take food, for example — but not the outrageously expensive MacFat burgers the writer seems to prefer, I can get an elegant three course continental dinner for USD15 (without the wine). That’s high off the hog here. That meal in a comparable US restaurant would cost be $35-45. Eat the local fare and the cost drops to as low USD1.25-1.50 for something equivalent to a MacFat burger meal but a lot healthier.

    Rents? Don’t get me going!

    Given the experience of five years, I have found a 6:1 ratio to be a good rule of thumb. I suggest that that is quite a counter argument to the original poster’s point.

    Regarding the implication (if I read the tone of the post correctly) that schools are out to screw teachers by charging fees in euros and paying in dollars, I think that’s going too far. If I ran a school (I don’t) I’d try to do the same thing, hoping I am right in guessing exchange rates! And mostly I won’t be! Otherwise, I’d be out sailing my yacht, not trying to run a school.


  7. Well, we can thank Mr Bush for spending 1 billion dollars a day (these were figures put out last year..I’m no expert, but if these are even close I can only say Shame)of American taxpayers’ money on military matters that don’t directly benefit his own country or make the world “a safer place”. It’s not safer.

    Some reports say the USD will come back in late 2010 or 2011. I actually have faith in the USD. Because of the current climate, it might be a good idea to freeze and protect the USD assets for a year or two, and invest in markets, based on your homework. Again I say, I’m no expert at all, but I really think it will bounce back…the US is nothing if not resourceful.


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